I figured in 5-7 years I would be making more money (which I am), be able to sell it off for enough to get a down payment on a newer home in a nicer school district (I am in a transitional neighborhood). Now. here we are 5 years later and there is no chance in heck that within 2 years I am going to be able to pay off the loan, let alone get my 20% back out of it My house is assessed by the County at $155K and on Zillow for $143 and Istill owe $222K on this place, not to mention the roof needs to be replaced.

I DON’T WANT TO LIVE HERE FOR THE REST OF MY LIFE AND RETIRE HERE BECAUSE THE FEDERAL GOVERNMENT & BANKS SCREWED ME. Screw them!! I pay my bills on time, every time. I have a low 800 FICO. Now they want to drive their Audis and live in gated communities and take vacations to Europe while I have to prop up the country on my friggin back? NO.

Two different attorneys told me to foreclose. They said don’t even short sell. That is just to help the banks and realtors. It doesn’t help my FICO enough to waste the time and energy.

My folks helped me out by getting a loan in their name, I’ll pay the mortgage, and they’ll leave it to me in the Trust when they die. I am actually moving to the house I want to retire in and my daughter can go to public schools that are in the Top 100 of the State. No more groups of teenage boys coming down the street dropping the F bomb in front of my 4 year old and calling each other the N word. No more cops coming down my street b/c the party on the corner is still raging at 2 AM. No more broken down cars in peoples driveways. We close on the new house in two weeks, and I am mailing in my keys.

I tried to play by the rules, but I just got played. I hear my score will probably be back in the 700′s again in two years if I keep paying everything else. I’m DONE with this nightmare. I will never trust the government ever again. You have to look at for yourself in this world. Nobody else will.

Now to basically say, well it is not problem, but the banks, it is not correct.

This is why we have the problem with crisis in the first place, people stopping to pay their debt on time. If one default is fine, if it is 10%, it is seriously concerning, but if it is 40% it is destroying markets and economies.

People who want to walk away because they’re paying more than a home is worth are in a different situation from me, they probably bought the home at the top of the market and they really are wasting a good 50-100k that they should never have agreed to pay. I guess whether to default or not depends on part on whether the house is a financial object or an emotional object to the borrowers.

I don’t have a mortgage (career renter) but the side of me who would have went to law school thinks this:

1. I signed a contract saying that I would receive X for making $Y payments for Z months.

2. My payment activity may be reported to the consumer reporting agencies.

3. If I fail to make those payments, certain actions may happen.

So, for those who say that “I agreed to make payments” well, yeah, I did. But they’re telling a half-truth. I agreed to make payments AND I agreed that if I failed to make those payments, then certain actions will happen. I signed the contract in its entirety, not just the part others want me to uphold. I signed an agreement that allows me to suffer the consequences for failing to perform. If I choose to suffer the consequences, then I should be allowed to not perform.

As an aside, (and perhaps relevant) supposedly there existed a day care facility who was having problems with parents picking up their children late. This was driving increased child-care costs because the staff needed to stay late. As a response, the facility came up with late fees, charging the parents a nominal amount for being late. In turn, this actually increased the number of parents who would pick their children up later, which was completed the opposite expected response. The conclusion was that once the “penalties” became part of the contract, the parents had no moral qualms by exercising that portion of the contract.

The economist in me (that’s the math/psych mix part of me) thinks that anybody who creates a contract, expecting/relying on performance, should create a situation that STRONGLY discourages non-performance. You don’t want strategic defaulters? Don’t lend in an environment that would encourage that, or change that environment.

As for those who live in non-recourse states, the appropriate response should have been to charge higher interest rates in the first place to cover that risk. Another possible business response is to simply not do business there.

I didn’t speak about morals and ethics, because, quite frankly, if Big Business doesn’t have to have them, why should consumers? (The selfish answer to that is *I* want you to perform on your contract, because if you don’t, it will make it more expensive for me in the future when I decide I can actually afford a house.)

If I were having little difficulty in making the mortgage, was in a stable employment situation, and liked the area, then who cares? That’s a quantitative assessment though and doubtlessly one made by people across the country who have not defaulted despite being upside down on their mortgage. It’s not worth the hit on the credit report and it’s not like they can easily get another cheaper property if they’ve defaulted on another one.